SHERMAN SHAFER V.

HON JUDGE, RTC OF OLONGAPO

CASE DOCTRINE
In the event that the injured fails or refuses to include the insurer as party defendant in his
claim for indemnity against the insured, the latter is not prevented by law to avail of the procedural
rules intended to avoid multiplicity of suits. Not even a “no action” clause under the policy which
requires that a final judgement be first obtained against the insured and that only thereafter can the
person insured recover on the policy can prevail over the Rules od Court provisions aimed at avoiding
multiplicity of suits
Facts:
On 2 January 1985, petitioner Sherman Shafer obtained a private car policy. During the effectivity of the
policy, information for reckless imprudence resulting in damage to property and serious physical injuries
was filed against petitioner. The owner of the damaged Volkswagen car filed a separate civil action
against petitioner for damages. Jovencio Poblete, Sr., who was a passenger in the Volkswagen car when
allegedly hit and bumped by the car driven by petitioner, did not reserve his right to file a separate civil
action for damages. Poblete, Sr. testified on his claim for damages for the serious physical injuries which
he claimed to have sustained as a result of the accident. Petitioner was granted leave by the former
presiding judge of the trial court to file a third party complaint against the herein private respondent,
Makati Insurance Company, Inc. Said insurance company, however, moved to vacate the order granting
leave to petitioner to file a third party complaint against it and/or to dismiss the same.
The court a quo issued an order dismissing the third party complaint on the ground that it was
premature based on the premise that unless the accused (herein petitioner) is found guilty and
sentenced to pay the offended party (Poblete, Sr.) indemnity or damages, the third party complaint is
without cause of action.
The court further stated that the better procedure is for the accused (petitioner) to wait for the
outcome of the criminal aspect of the case to determine whether or not the accused, also the third
party plaintiff,has a cause of action against the third party defendant for the enforcement of its third
party liability (TPL) under the insurance contract.
Issues:
whether the accused in a criminal action for reckless imprudence, where the civil action is jointly
prosecuted, can legally implead the insurance company as third party defendant under its private car
insurance policy, as one of his modes of defense in the civil aspect of said proceedings.
Ruling:
In the event that the injured fails or refuses to include the insurer as party defendant in his claim for
indemnity against the insured, the latter is not prevented by law to avail of the procedural rules
intended to avoid multiplicity of suits. Not even a "no action" clause... under the policy which requires
that a final judgment be first obtained against the insured and that only thereafter can the person
insured recover on the policy can prevail over the Rules of Court provisions aimed at avoiding
multiplicity of suits.
There is no need on the part of the insured to wait for the decision of the... trial court finding him guilty
of reckless imprudence. The occurrence of the injury to the third party immediately gave rise to the
liability of the insurer under its policy.
In the instant case, the civil aspect of the offense charged, i.e., serious physical injuries allegedly
suffered by Jovencio Poblete, Sr., was impliedly instituted with the criminal case. Petitioner may thus
raise all defenses available to him insofar as the criminal and civil... aspects of the case are concerned.
The claim of petitioner for payment of indemnity to the injured third party, under the insurance policy,
for the alleged bodily injuries caused to said third party, arose from the offense charged in the criminal
case, from which the injured
(Jovencio Poblete, Sr.) has sought to recover civil damages. Hence, such claim of petitioner against the
insurance company cannot be regarded as not related to the criminal action.
WHEREFORE, the instant petition is GRANTED.
Principles:
Compulsory Motor Vehicle Liability Insurance (third party liability, or TPL) is primarily intended to
provide compensation for the death or bodily injuries suffered by innocent third parties or passengers as
a result of a negligent operation and use of motor vehicles. The victims and/or their defendants are
assured of immediate financial assistance, regardless of the financial capacity of motor vehicle owners.
The liability of the insurance company under the Compulsory Motor Vehicle Liability Insurance is for loss
or damage. Where an insurance policy insures directly against liability, the insurer's liability accrues
immediately upon the occurrence of the injury or event upon which the liability depends, and does not
depend on the recovery of judgment by the injured party against the insured.
The injured for whom the contract of insurance is intended can sue directly the insurer. The general
purpose of statutes enabling an injured person to proceed directly against the insurer is to protect
injured persons against the insolvency of the insured who causes such injury, and to give such injured
person a certain beneficial interest in the proceeds of the policy, and statutes are to be liberally
construed so that their intended purpose may be accomplished.